The German government is planning to direct more foreign investment to markets outside China with the aim of reducing dependence on the world’s second largest economy.
At the proposal of Economics Minister Robert Habeck, Chancellor Olaf Scholz’s executive coalition has agreed to review the mechanism of so-called investment guarantees, according to ministerial sources quoted by the dpa agency.
The Cabinet’s investment guarantees allow German companies to insure their investments in emerging and developing countries against political risks, such as expropriation or capital and transfer restrictions.
The news comes as Habeck is scheduled to travel to Singapore on Friday to attend a German business conference. Scholz will also attend, traveling to Singapore from Vietnam, before flying to the G20 summit in Bali.
The Asia-Pacific Conference of German Industry, to be held Nov. 13-14, will focus on how to expand supply routes. German dependence on Russian fossil fuels has triggered a wide-ranging debate on reducing economic dependence on China.
Revising the mechanism would provide German companies with greater support in opening up new markets in the future, and create an incentive for diversification. German companies would receive «effective» assistance in launching projects in countries that have so far not been the center of economic activity, but which offer great potential, the sources said.
